Scrappy to sophisticated: How modern CPG brands are winning in a fragmented market

From niche disruptors to established brands, there is more competition between consumer packaged goods (CPG) brands for shelf space and consumer dollars. 

The value the CPG markets adds per capita worldwide is projected to hit $634.73 by the end of 2025. While the global CPG market is predicted to reach $10 trillion by 2028. 

Beyond rising competition, CPG brands are facing large-scale economic slowdowns, consumer fragmentation and escalating and volatile costs that challenge brands’ traditional cost-management strategies. 

In this post, I’ll walk you through the ins-and-outs of launching a successful CPG product and show you how to grow a CPG brand from the perspective of successful founders. 

If you’re curious about how to start a CPG brand then you first need to understand the market and current opportunities for product development.

One of the biggest consumer shifts is a growing interest in, “Better for you and better for the planet.” Consumers are prioritizing more wholefood ingredients, less processed and chemical-laden products and labeling transparency from their CPG brands. 

77% of people say they want to have a healthier diet. 59% of Americans say they recently bought a new product because of its health benefits. 

Moreover, 47% of consumers say they've specifically bought a food or beverage in the last 30 days to get more vitamins or nutrients, while 33% buy to improve sleep and 29% to support gut health.

And consumers are willing to spend an average of 9.7% more on sustainable products. 

JuneShine, founded in June 2018 by Greg Serrao and Joshua Makler in California, is one example of a successful CPG brand that's won over both health-conscious consumers and investors with their hard kombucha. 

The duo set out to create a healthier organic alcoholic beverage, aiming to make, “Honest alcohol for a healthier planet,” in their garage when first starting out. In 2021, they raised an impressive $24 million in a series B round after tripling their revenue between 2019 and 2020, highlighting the desirability of a niche CPG product that perfectly targets current consumer needs. 

Many modern disruptive CPG brands are giving their brands the best chance of success by listening to consumers at the earliest stages of brand and product development. 

Founders are using rapid iteration cycles to validate product ideas early and guide product development. Strategic CPG brands use quick-hits of consumer insights to validate early product ideas before moving forward with product development, helping to ensure market fit and saving costs, as is essential in the CPG space. 

Many brands rely on agile feedback loops in which consumer research and feedback is baked into their pre-launch strategies and continues to guide their strategy as their brand grows. Combining research strategies like surveys, interviews, focus groups and user tests with first-party behavioral data, third-party market data and social listening insights.

Beyond ideation, product manufacturing and associated costs also needs to be factored in. 

Reddit user OneManPonyShow says: “Many people outsource the production from the beginning, this is another huge area for failure/success. Finding the right producer is critical to your success if you go this route. Otherwise your margins will be eaten up and you will scale the business to your detriment.” 

In addition, you also need to decide on where to store your product inventory, calculating factors like space, cost, accessibility and additional storage needs like freezer space. Reddit User Hotpocket14 says: 

“The manufacturing costs are by far the biggest expense. And it’s an area where people get taken advantage of. So do your research, make sure the cogs seem good to you and understand what the manufacturer's minimum order is. Also, you’ll need a place to store all your inventory, so depending on the size of your products, that might be your garage, a storage unit, a spare bedroom, a 3pl facility or your own warehouse…or in some cases, it might need to be refrigerated storage - which adds a whole new level of complexity.”

Read more about JuneShine and other CPG disruptors and their playbooks for success in our past post.

In 2025, there are many conflicting opinions about the best channels for selling products among CPG company founders. 

Is retail the only way? Or is it too expensive? Is direct-to-consumer (DTC) the ideal channel to cut costs and retain control of your product? Or do the average omni-channel-shopping habits of consumers mean you need to be on as many offline and online channels as you can afford to be? 

Reddit user and successful CPG entrepreneur ilurvefba shares his view that the future of CPG is purely DTC: “The focus now is on DTC/Amazon and I’d only do retail again if it was Walmart probably.” 

Hotpocket14 says of their own experience: “DTC is expensive, so if that’s the route you’re going, just know it will always cost more than you think. If you’re going to retail, make sure your margins are good enough to sell at a 50% discount for wholesale.

For kids toys and games, trying to get into retail is extremely hard unless you have an extremely novel product. Sale rep groups are the gatekeepers, and they want to work with brands that have multiple SKUs, because it makes their life easier. I know grocery is a little different, but if it’s not sales reps, then it’s distributors. So, depending on your product, you have to be scrappy until you get to a point that reps/distributors are willing to take you on.”

When it comes to landing in a retail store, many CPG founders recommend working with local retail brokers who have access to extensive retail networks and can act as an intermediary between retailers and your brand. rnabo says:

While Joseph Rotondo, founder of the protein-based ice cream brand Smearcase, highlights the importance of forming strong, in-person relationships with retailers. He says:

“My favorite way of getting in front of retailers has been going to networking events and trade shows. 

You’re able to get right in front of them and build a relationship face to face - which is how us humans are meant to build.”

It’s also essential that CPG brands don’t see landing shelf space as a sign to start coasting, as Reddit user OneManPonyShow says: “Oh you got on the shelves?! Huge accomplishment, but far from success. You need to consistently move product OFF the shelves, this is where the real work begins. Managing promotional schedules and coinciding production and distribution timelines. If you aren’t growing and providing consistent high velocity sales (category dependent) your product will get mercilessly cut, or worse, you will operate at a loss and the more you sell the more you lose!”

And when it comes to retaining your shelf space, brand consultant Kathryn Tuttle highlights the importance of staying continuously connected to your consumers and how they’re responding to your product on shelves to help keep your brand in store, she says: 

"Consumer-packaged-goods companies used to outperform through high growth at constant margins, but that changed in the 2010s. The collective result of scrambling for growth while making it up on cost is a new profit-and-loss (P&L) shape. ROIC excluding goodwill is at 27 percent, up 400 basis points from the end of Era 1, and SG&A is down 250 basis points. It is a real restructuring (Exhibit 2). But investors' belief in the sector’s ability to generate sustainable performance has plummeted. All CPG subsectors are feeling the pain. CPG companies, therefore, face two urgent needs: renewing growth when opportunities are limited and reducing costs when companies have already done a lot." - McKinsey & Company

Far removed from the extensive venture capital that drove much of the CPG industry throughout the 2010s, many CPG brands are taking more cautious, strategic approaches to securing funding in 2025. 

Bootstrapping has become a resurgent strategy for many CPG founders looking to maintain creative control and ownership of their business. Arshad Bahl, founder of Amrita Health Foods, says: "CPG is one of the toughest industries to bootstrap because of cash flow and tight margins. But I believe true freedom comes from creating your own path. I wanted to build something on my terms, where every decision reflects my vision, passion, and purpose—without anyone else defining my journey. And above all spend more time with my family. " 

On the downside, bootstrapping is high pressure — personal finances are on the line, growth is often slow and lack of external capital can mean every marketing, product and hiring decision comes with a huge amount of risk. 

But EOS implementer Dan Bubniak says this can sometimes be part of what makes CPG entrepreneurs successful in the long run: “I'd bet that any Founder or CEO of a high growth business that bootstraps for years will be better than most at allocating capital, managing risk, leveraging creativity, and holding other execs accountable. When your ass is to the fire and your own money is on the line, you're forced to become resilient, creative, financially adept, and risk aware. You level up on skills that will pay off for the rest of your life.”

While venture capital (VC) is hard to secure and early-stage VC funding for CPGs has noticeably declined over the last decade, CPGs with strong founder stories that connect to consumers and digital reach can often still attract funding. 

Take Chobani — one of America's best-selling Greek yogurt brands. Chobani's founder, Hamdi Ulukaya, a Kurdish immigrant from Turkey, came to the U.S. with just a few thousand dollars in his pocket. In 2005, he came across an ad for an abandoned, 80-year-old Kraft yogurt factory in upstate New York. 

Going against the advice of his lawyer, Ulukaya bought the factory with a Small Business Administration loan. Despite bootstrapping in the earliest days of his company, Ulukaya quickly attracted private equity funding from firms like TPG Capital — allowing him to scale his manufacturing and roll out marketing to rival his big dairy competitors. 

As a growing alternative, crowdfunding has become popular among early-stage and pre-launch CPG startups — giving them a way to test their concepts, build their reputation, and secure thousands of pre-orders with minimal upfront investment. Tim Richards of Philosopher Foods shares his advice.

To survive as a CPG brand in 2025, you need to be highly cost efficient when it comes to production, branding and marketing, supply chain logistics, distribution and in securing and retaining retail relationships. 

High costs and lack of financial acuity are arguably the main reasons that 90% of all CPG brands fail in their first two years. With many successful company founders recommending new founders  aim for 65% gross margins. 

Cash efficiency is essential to building a successful CPG brand. As CPG advisor Luke Abbott says, cash is a company’s life blood — no cash, no company. He shares: 

“The days of running CPG companies to the edge on cash and assuming that we are going to be able to raise capital are three years in the rearview mirror for most brands.  

I strongly believe in the—cash-efficient—"bullets before cannon balls" approach to growing brands. Let's start with fewer stores with a new brand or product and dominate our success in those stores. We can pour so much love and attention into each store that our success is virtually assured—plus, we get a chance to learn and grow, so we get it right when we go big.

Essentially, we shoot the (lower-cost) bullets until we hit our target, and then we shoot our (more expensive) cannon balls at the confirmed target. 

And before we start any initiative, we build out a cash flow model so that we don't get caught with an empty bank account. If the model doesn't support what I'm considering doing, I raise the money or adjust the plan. It's simple and sustainable. 

I heard a saying the other day that stuck with me, "Slow down to go fast." I agree!”

In the early stages, to give your CPG brand the best chance of success, financial modelling is essential — incorporating revenue projections, cost analysis, cash flow forecasts and growth scenarios.

Companies should also act quickly when they first start to experience more concerning financial pressures. Pedro Noyola, CEO at Balanced Business Group — an organization that provides bookkeeping, accounting and finance services to wineries and specialty foods brands, advises CPG brands to focus on strategically cutting costs when cash becomes tight. That means paying non-essential payments and only focusing on spending that drives revenue. He also recommends that brands communicate transparently with vendors and reach out to renegotiate terms — noting that many vendors would prefer to keep loyal clients than lose their business entirely. 

What makes for a strong CPG marketing strategy?

Caroline Grace, Growth Strategist for Emerging CPG brands, says if she were launching a CPG brand today then she would put the consumer her brand was ideally built for at the center of every business decision, she says: 

“Build the brand world first. I’d be able to answer: Who desperately needs this? Why NOW? This becomes your north star for every decision—from recipe to packaging to pricing.” 

Consumer insights are an essential foundation for customer-focused branding and marketing. It’s a necessity to understand who your customers are, what specific needs your product serves for them, and what kinds of brand, product, and marketing experiences motivate them to buy. 

In addition, narrative brand storytelling has also become a core part of many brands’ strategies, helping them to more deeply connect with consumers by providing strong leading “characters” (aka founders) and rich backstories that include many of the defining features of a great story arc including struggle and victory. 

“CPGs need to move beyond a “sell to everyone” mentality. Instead, they need to connect with consumers on a deeper level, aligning with their values, goals, and concerns. They need to tailor their storytelling and creatives to a range from social media to video platforms to retailer environments, online and offline.”

- Nelleke van Grinsven, Media Director at DEPT.

Tara Bosch is a great example of a founder with a backstory that resonates with many consumers. She founded her reduced-sugar candy brand SmartSweets so she could enjoy the nostalgic hit of eating similar candy she used to share with her grandma, only with less sugar: 

Which formats and channels are performing well in 2025? 

Many CPG brands are leaning heavily into user-generated content (UGC) to build brand awareness and engagement with social media challenges, customer stories, unboxing videos, user reviews and branded hashtags to inspire content creation.  

Beauty brand e.l.f Cosmetics created an original song and paired it with the hashtag #eyeslipsface, sparking a viral challenge — with TikTok creators following up with millions of user-generated videos, amassing over 10 billion views.

"What visual UGC really provides is authenticity. UGC is content created by real people, and consumers are more likely to view a brand as authentic because of it."

- Ben Salomon, Growth Marketing Manager, Yotpo

But only 50% of CPG advertising is digital. 

Sampling still continues to generate both immediate purchases and long-term growth for brands. 35% of consumers who get a free sample buy the same product immediately, reports Soho Sampling. While Arbitron and Edison Media Research found that 47% of customers were open to purchasing sampled products later. 

Noah Sandborn Friedman, co-founder of Top Shelf Ventures, emphasizes that the human connection (with a side of charisma) is the foundation of effective in-store sampling, far outweighing the impact of flashy displays or impressive technological solutions: 

“I've seen so many brands spend crazy amounts of money on extravagant displays and tasting setups only to have a low-energy, untrained person running the tasting. This is usually a total waste of money. 

On the other hand, I've seen brands with highly minimalistic displays invest heavily in world-class samplers and tasters and end up CRUSHING the competition. 

Having the right team executing your ground game is truly often the difference between winning and fading away. 

For any and all CPG brands looking to launch, scale, or just take your velocity to the next level, I'd highly recommend focusing on improving your ground game by focusing on your PEOPLE! 

Like most things in business, it really is all about the people.”

With so many DTC CPG brands on the rise, and an increasing number of consumers shopping online or via ecommerce platforms, many CPG brands are also encouraging user reviews by shipping free product samples in exchange for honest feedback. 

Reviews are still one of the most powerful ways to build brand and product awareness and drive consumer purchases with 88% of consumers saying trustworthy reviews increase their level of trust in a brand. 

Many CPG brands are blending reviews with UGC and Gen Z’s favorite digital medium: short-form videos. 

Short-form video reviews hit on multiple points: they’re engaging, easy to remember, demand less attention and energy to consume than written reviews, and build trust with consumers.

72% of consumers say they trust a brand with positive video testimonials more. While consumers retain 95% of the content in a video review compared to 10% for a written review. 

Find out how to continue to create cutting-edge CPG campaigns in our past post.

From hungry shoppers looking to pick up a snack to the consumer who just remembered they ran out of toothpaste as they pass their local grocery store, every CPG brand understands how in-person buying decisions are the most essential to their bottom line. 

In-store sampling has a powerful effect on sales with some sampling events increasing sales by up to 475%. Many brands are capturing consumers’ attention and driving sales with in-store demonstrations and product walk-throughs, combined promos for full-sized products and self-service digital sampling kiosks. 

Pop-up stores and events are another way brands impress consumers in-store. Immersive. Engaging. And perfect for sharing across socials.

Tania at The London Thing shared her experience at the London Magnum Pleasure Store on her blog; highlighting the intensive, multi-sensory experience: 

“I was so excited that the store has opened in London and that you are able to customise your own Magnum. I was super happy to see that after you get inside the atmosphere was chill and people had the option to sit down and enjoy their ice cream which can quite easily turn into a messy affair, especially if you go for double coated option. As expected the store interiors were in rich brown colour decorated with cute quotes and of course pictures of beautiful Kendall Jenner.”

She adds:

“I, of course, decided to opt for Magnum Double available in peanut butter and chocolate flavours. I chose the Classic in double chocolate accompanied with 3 toppings out of which I picked rose petals, almonds, and pistachios. My Magnum was double dipped and covered in white chocolate sprinkled with dark chocolate coating. The finishing touch was a classic M coin decoration which I thought it was so cute.”

Brands are experimenting more and more with a range of digital advertising options including gamified digital displays, digital self-serve sampling kiosks, AR and interactive AI-based displays. 

Read more about the best formats and strategies for digital in-store retail here. 

Nearly 50% of Gen Z and Millennial consumers follow influencers to find out about cool new products, reports Captiv. 

“The digital landscape is awash with content creators spanning every conceivable niche. However, the sheer volume of available content has diluted the impact of individual influencers. Now, the true measure of influence is no longer just about reach; it's about the depth of connection with an audience's aspirations and identity.” David Olusegun, The Creators Blueprint (Pull quote)

CPG brands are leaning into micro and nano audiences to connect with consumers in niche audiences with high levels of trust. Nano influencers have up to 10k, while micro have up to 50k. 

Rafael Schwartz, Managing director at TERRITORY Influence, a social media and influencer marketing agency for CPG brands, says:

“With influencer marketing firmly embedded in CPG companies' strategies, many CMOs are looking at a new category of influencers with fewer followers but higher engagement and trust levels to separate from their peers.”

He adds:

“We consider nano-influencers as a distinct segment within the influencer tier pyramid, characterized by their modest yet highly engaged following of up to 1,000 individuals.

What sets them apart is their unparalleled ability to foster genuine connections with their audience through personal stories and authentic dialogue.

Years ago, marketers might have called these consumers brand advocates, brand ambassadors or seeders, valuing them mostly for their potent word-of-mouth recommendations.

Nano-influencers excel in cultivating meaningful interactions with their audience, fostering vibrant communities around their content. As a result, their content generates twice as many interactions compared to macro-influencers.”

Smaller-scale influencers like micro and nano influencers have the ability to form deeper connections with followers. Trust and authenticity is high. And consumers feel more connected to their favorite influencers when they follow their recommendations. 

Despite the rise in influencer partnerships, celebrity endorsements still hold weight in the CPG space. By helping to build a deeper narrative of cultural significance around their products, celebrity endorsements can help turn CPG goods from products of consumption into symbols of consumers’ social identity and the wider cultural dialogue.

Take Snoop Dogg and Happi Co.’s  Dr. Bombay ice cream which comes in fun flavors that reflect Snoop’s playful persona and wider hip-hop culture. The line includes: Bonus Track Brownie, Cocoa Cream Cookie Dream, Iced Out Orange Cream, Rollin' In the Dough, S'more Vibes, Syrupy Waffle Sundaze and Tropical Sherbet Swizzle.

“Dr. Bombay is Snoop Dogg's sidekick and embodies the essence of West Coast culture throughout Snoop's life, paying homage to the rebellious aesthetic of the '70s, the infectious slang of hip hop's rise in the '90s, and the tech boom of the 2010s.”

- Prepared Foods

As a new CPG founder, it’s important to be aware of the operational challenges brands face when moving from niche success to national growth.

Success relies on building out and scaling your tech, systems and your processes to help make sure you have the foundations in place to take your brand from niche to national. 

Adam Sisken, CPG brand advisor, shares these words of advice on GPG brand building: “Don’t chase national before owning local. Don’t go into Whole Foods if you don’t have the cash to support resets, promos, and trade spend. Pick the right shelf before the big one.”

Mango-bat on Reddit says it’s important to do background research on potential manufacturers as you scale:

John Foraker, CEO at Once Upon a Farm, also emphasizes the wisdom of focusing your hiring efforts just below top-level management as you scale:

“What is less understood and therefore undervalued is what I call the “next 20 or 30”. Those are the 20-30 people just below the top level management team. I’ve found they are most crucial to an organization’s ability to scale fast, efficiently, and effectively. 

I didn’t understand that the same way at Annie's Inc. regrettably, and think we’d have grown faster and better if I had. But we’ve really focused on it at Once Upon a Farm and it’s paid off big. Focus on hiring the BEST here, invest in quality training resources to grow their ability to  problem solve, lead, communicate, to be cross functional collaborators and good managers of people. Encourage them to build support networks and personal connections. 

Of course, Invest in your top level management team too to get them comfortable pushing authority and decision making down to these key people. I’ve found that the “chunks” of $ growth get vastly bigger as you scale and these people are what truly enable and empower that acceleration.”

Launching a CPG brand can feel intimidating, from working out your logistics to making your first hires. 

Take these insights from some of the most prominent rising CPG brands and see how you can apply them to your own strategy, whether that’s going all in on narrative storytelling or validating your early product ideas.